NOTE 16 – SUBSEQUENT EVENTS

Management has evaluated subsequent events pursuant to the requirements of ASC Topic 855 from the balance sheet date through the date these condensed consolidated financial statements were issued. Other than as described below, management determined that no subsequent events require recognition or disclosure. Each of the transactions described below is a non-recognized subsequent event and, accordingly, is not reflected in the accompanying June 30, 2026 financial statements.

Corporate Reorganization

On July 2, 2026, the Company formed Starco Manufacturing, LLC, and on July 6, 2026, the Company formed Starco Brands, LLC, each of which are Nevada limited liability companies and wholly owned subsidiaries of the Company. On July 6, 2026, the Company contributed 100% of the equity interests of The AOS Group, Inc., Soylent Nutrition, Inc., Skylar Body, LLC, and Whipshots Holdings, LLC held by the Company down to Starco Brands, LLC, in exchange for 100% of the equity interests of Starco Brands, LLC (the “Contribution” and together with the formation of Starco Brands, LLC and Starco Manufacturing, LLC, the “Reorganization”). The Reorganization established a holding-company structure beneath the Company, was accounted for as a transaction between entities under common control at carryover basis and had no effect on the Company’s consolidated financial position, results of operations, cash flows, or reportable segments.

Acquisition of Custom Foods, LLC (Custom Bakehouse)

On July 15, 2026, the Company, through its wholly owned subsidiary Starco Manufacturing, LLC, acquired all of the outstanding securities of Custom Foods, LLC (dba Custom Bakehouse) for total consideration of $8.0 million in cash paid at closing and, if earned, up to $2.5 million of contingent earn-out consideration based on the achievement of specified net-revenue metrics for the year ending December 31, 2027 (the “Custom Foods Acquisition”). The Custom Foods Acquisition was funded with borrowings under the Pasadena Private Lending facility described below and is accounted for as a business combination under ASC 805, with contingent consideration recognized at fair value as part of the consideration transferred. The initial accounting for the business combination is incomplete as of the date of this report; accordingly, the amounts recognized for the major classes of assets acquired and liabilities assumed, including goodwill and the contingent-consideration liability, are not yet available. The Company will file the financial statements of the business acquired and the related pro forma financial information by amendment to its Current Report on Form 8-K, filed with the Commission on July 21, 2026, within the period required by Item 9.01 of Form 8-K.

Pasadena Private Lending Credit Facility

On July 15, 2026, the Company and each of its subsidiaries (including the newly acquired Custom Foods and its subsidiaries) entered into a Loan Agreement with Pasadena Private Lending Inc. providing for an $11.0 million initial term loan, a $4.0 million accordion term-loan feature, and a $3.0 million revolving line of credit (the “Pasadena Private Lending facility”). The obligations are cross-collateralized and secured by substantially all assets of the borrowers with pledges of equity interests of the Company’s securities and are further guaranteed by the Company’s Chief Executive Officer and certain family trusts. The Pasadena Private Lending facility contains customary affirmative and negative covenants and financial covenants, including a maximum senior debt-to-EBITDA ratio of 3.00 to 1.00 and a minimum fixed-charge coverage ratio of 2.00 to 1.00, tested quarterly. The Company paid a non-refundable closing fee of $220,000. Proceeds of the term loan were used to fund the Custom Foods acquisition and provide for working capital, with revolving and accordion amounts available for future use.

Related-Party Bridge Loan

The Company’s Bridge Term Loan Promissory Note dated December 22, 2025, issued in favor of The Starco Group, Inc., a related party, is reflected as a related-party note payable in the accompanying balance sheet (the “Bridge Loan”). In July 2026, in connection with the Pasadena Private Lending facility described above, the Bridge Loan was subordinated to the Pasadena Private Lending facility.

Amended and Restated Convertible Promissory Note - Related Party

On July 15, 2026, in connection with the credit facility and the required subordination of the Company’s indebtedness to its Chief Executive Officer, the Company amended and restated the Consolidated Secured Promissory Note, as amended by Amendment Number One, and further amended by Amendment Number Two, issued by the company to Ross Sklar (the “Sklar Note”) into an Amended and Restated Secured Convertible Promissory Note in the same principal amount of $3,472,500 (the “Restated Note”). The Restated Note bears the same interest of the Sklar Note at the Wall Street Journal Prime Rate plus 2.00% per annum, matures March 31, 2030, is subordinated to the Pasadena Private Lending facility, and is convertible, at the holder’s option, into shares of the Company’s Class A common stock at a conversion price of $0.04 per share. The Company is evaluating the accounting for the amendment under ASC 470-50 (modification versus extinguishment) and ASC 815-40 (conversion feature), the effects of which will be reflected in the Company’s third-quarter financial statements.